JK Lakshmi Cement (JKLC IN) – Q2FY27 Result Update – Cost inflation clouds near term outlook – BUY
Published on 06 Nov 2026
JKLC’s volume growth is lagging the industry over last few quarters while capacity expansion plans also seem fragile in terms of planned timeline. While the company continues to focus on volume-led growth, sustaining market share gains will be important amid intensifying competition and elevated input cost pressures. While price increases were implemented in October, further hikes of ~INR10/bag in November and INR10-15/bag in December are expected, and their sustainability will be a key monitorable. Higher renewable energy usage and operational efficiencies should support cost savings, while timely execution of the East and Northeast expansion plans will be important to drive growth. This needs to be balanced with prudent capital allocation, with Mgmt. aiming to keep net debt/EBITDA below 3.5x. We cut our estimates for FY27/28E by 6% each on imminent cost inflation and expect JKLC to deliver EBITDA/volume CAGR of 16% & 10% over FY26-29E. The stock is trading at lucrative EV of 8x/6.6x FY28/29E EBITDA however lack triggers. Maintain ‘BUY’ with revised TP of INR665 (earlier INR699) valuing at same 9x EV of Sep’28E EBITDA.
